1 December, 2014

The Spanish Tax Reform: Will We Pay Less Taxes? – PBS

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The Spanish Official Gazette published, on Nov. 28, the final texts of the Laws that modify the Spanish tax system.

This final publication completes the process of Tax Reform undergone in Spain, although the modification of the General Tax Law is still pending.

Most of the measures undertaken will come into effect from January 1st 2015. It is, therefore, highly recommendable to seek appropriate advice of their concrete implications for each taxpayer.

✔ The Laws that have been published affect:


  • Personal income tax and Non-Residents income tax.
  • Corporate income tax.
  • In relation to indirect taxes, VAT and the Canary Islands tax system.


✔ We remind you that the Experts’ Commission to reform Spanish tax system was set up, as agreed by the Ministries’ Council, with the aim of elaborating a reform proposal to contribute to Spain’s  fiscal consolidation as well as its economic recovery and, more concretely, to the creation of employment.

Under such premises and as a result of the Commission’s work, the so-called “Lagares report” was delivered to the Spanish Government last March 13 2014, as the inspiring background of the Reform.

✔ Two main pillars of the Spanish tax system, Personal income tax as well as Corporation tax, have maintained their basic structure.

It has been publicized that a general reduction of Personal income tax will be achieved, mainly affecting individuals obtaining employment, professional and entrepreneurial income, with lower revenues.

The standard Corporation income tax rate has also been reduced from 30 to 25%, with the aim of favouring the increase of Spain’s economic competitiveness.

✔ Despite these good news, we draw your attention to the fact that the Reform keeps as one of its main objectives the need to reinforce the fight against fiscal fraud.

Besides, some of the approved measures imply a reduction of tax incentives that formerly achieved the reduction of taxation. All of it, within a context aiming at situating Corporation tax as the key element to contribute sustaining public expenditure, after the exceptional collection crisis suffered in the last years.

We still believe that the Spanish Tax Reform brings a time for new tax opportunities, providing appropriate planning and tax advice are obtained.

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